Trust versus corporation in securitization

Under the corporation, the original credit-sensitive assets serve as collateral for the asset-backed securities issued to investors. Under the trusts, as the Master Trust deposits assets into the Grantor trust in exchange for a beneficial interest, the beneficial interest serve as the collateral.

Category:

Howto & Style

Tags:

• corporate
• credit
• master
• risk
• securitization
• trust

[smokenfly514]

Ohhh I think I just got it

[smokenfly514]

So if SPE 1 can't pay out receivables, you'd be held liable, but if you transfer the ABSs to SPE 2, such is no longer the case? I think I'm not getting something here, can someone please explain lol

[nicoledelapena]

thanks for the video..

[WGS669]

So if millions of mortgage notes pledged to MBS were not put into those bankruptcy remote thingies when they were supposed to be... Would that mean homes, or the "lost" promises to pay, are still tied to the (probably defunct) originator? Could those notes have ended up pledged to multiple buyers at the same time? Could bogus "credit sensitive assets" be fabricated and securitized? Or used in repo agreements? And what about all the CDS derived from it? Can QE quarantine all that? /sigh